Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.644 | EURUSD 1.17346 | AUDUSD 0.77759 | NZDUSD 0.70899 | USDCAD 1.25319 | USDCHF 0.97777 | GBPUSD 1.30676 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.17475 | 1.17318

USDJPY                 112.671 | 112.338

GBPUSD               1.31023 | 1.3075

AUDUSD              0.77824 | 0.77599

USDCHF               0.97859 | 0.97749

USDCAD               1.25434 | 1.25267

NZDUSD               0.70800 | 0.70597

EURGBP               1.14849 | 1.14744

EURCHF                0.89773 | 0.89593

EURJPY                 132.254 | 131.861

For today

• EUR: With a US and Japanese bank holidays the market was rather quiet through the session with the Euro opening very little movement the market traded for the most part around the 1.1740 levels with dips into the low 1.1730 area and rising just above the 1.1745 level into the mid-session with the market moving into the grey hour holding around the opening levels. For the moment the market looks to be caught in this congestive areas with downside bids into the 1.1660 areas and possibly stronger bids there protecting a deeper move with sentimental values the strongest points until the 1.1500 areas with strong bids into and through the level however, with the aforementioned bank holidays the market is likely to be limited. Topside offers light through the 1.1750 areas with stronger offers likely on a move towards the 1.1800 areas with those offers likely to be light through to the 1.1840 area and increasing from that point through to the 1.1900 level.
• GBP: Cable opened in line with the close and quickly rose top test above the 1.3090 areas and then slipping into the closed Tokyo session holding around the 1.3080 through to the last few hours where the market again started to rise to push lightly through the 1.3100, whether the comments from PM May bolstered the market remains to be see but on a quiet day it was the only thing to happen, Downside bids into the 1.3050 level and a little congestion through the level, with stronger bids likely to continue on a move lower and into the 1.3000 with very little in the way of stops, a push through could see some stops but congestion through to the 1.2950 levels and continued congestion from there. Topside offers light through to the 1.3200 areas with weak stops on a move through the level with congestive offers likely to continue through 1.3250 areas until the slightly stronger 1.3300 area is reached.
• JPY: USDJPY opened slightly lower with the market dipping through to the 112.35 levels before rising back to the opening levels and ranging slowly around the 112.60 level into the grey hour. Topside offers into the 113.50 levels with likely weak stops being joined by larger breakout types for a move to test the 1.1400 level and the highs in May and July, strong offers in the areas moving towards the 114.50 level and then even greater potential for a move through to ranges not seen since the end of 2016, Downside bids light through to the 112.00 level and even there its debatable whether there would be sufficient to hold a move that low, a test through the levels will likely see congestive bids appearing on a move through to the 111.60-40 areas and for the day possibly thicker with bids left in the market by Japanese buyers and a tougher prospect from there today.
• AUD: Oz opened unchanged and has continued to trade around the 0.7775 level with minor pushes above the 0.7780 level with a couple of dips down to the 0.7765 with the later attempt pushing in towards the grey hour around the lows. The 0.7775 still remains the focus for the market at the moment however, stronger bids into the 0.7730 areas and a weaker supportive line however, any movement for the market is likely to during the London session with the downside now likely to be weak through that area and to the 76 cent handle. Topside offers light through the 78 cent level and then increasing once the market starts to test the 0.7840-60 areas with likely weak stops on the move through and stronger offers reappearing into the 79 cent level.

Overnight News

CNY:

China denies links to alleged cyber-attacks in US targeting exiled tycoon Guo

China services sector growth fall to 21 month low in September

GBP:

Weakened PM May to give bullish Brexit prognosis but say’s ball in EU’s court

USD:

Top republican lawmaker says US on course for WWIII with Trump at helm

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

CNY        Caixin PMI Services Sep A 50.6 | C 53.1 | P 52.7

06:00     EUR        German Industrial Production M/M Aug C 0.90% | P 0.00%

08:30     EUR        Eurozone Sentix Investor Confidence Oct C 28.5 | P 28.2

Weekend News

KRW:

Kim Jong Un praises nuclear program and promotes sister to centre of power

RUB:

Russia lawmakers say N. Korea may test longer range missile soon bbg

USD:

Hurricane Nate menaces US gulf coast with $4B loss bbg

NZD:

NZ National party loses 2 seats to 56 in final election result

NZ Labour party gains 1 seat to 46 in final election result

NZ Green party gains 1 seat to 8 in final election result

USD:

Trump at N. Korea only one thing will work bbg

Iran warns US against imposing further sanctions

EUR:

Thousands protest in Barcelona against Catalan independence

TRY:

Erodogan: Turkey cannot allow terrorist organisations to roam free

Erodogan: Turkish forces did not enter Syria yet

Harry Hindsight

• EUR: Euro’s opened around the 1.1705-10 areas and moved into the Tokyo session pushing only to the 1.1715 areas before dipping back of some limited USD buying for the Tokyo fix, the dip to the figure area was quickly reversed and the market ranged for a short period back in the 1.1710-15 areas before slowly slipping through the 1.1700 level as early Europeans sold through to the 1.1685 level before finding a base, the move into the London session saw the market ranging from the low to the 1.1705 levels with increasing German factory numbers helping the Euro a little but the market rally back to the opening levels took the market through to the NFP numbers with a negative number offset by a fall in the unemployment rate and the Euro falling back to the 1.1670 level before bouncing back to the figure as the market adjusted to the first negative number since 2011, the market looked at the figures being a temporary situation and the Euro pushed through to make his for the day above the 1.1735 and ranged through to the close decreasing in range to hold that high.
• GBP: Cable opened around the 1.3120 levels and spent most of the day moving lower, the Asian session saw some light USD buying into the Tokyo fix and tested the 1.3090 level before pushing back above the figure, the move through to the London session again saw the downside under pressure and the market dipped through to the 1.3080 levels then in a tight channel continued to slip through towards the NYK session, the market bounced on the numbers testing back to the 1.3100 areas before falling back again this time cutting through the 1.3050 areas and into the congestive bids, the market was reasonably choppy and tested to  the 1.3030 before starting a steady rise through to the close around the 1.3070.
• JPY: USDJPY was quiet for the most part with the market opening around the 112.80 areas and then pushing up to the 113.00 levels as the market approached the grey hour, the level held for the most part testing lightly through before drifting a little into the NYK session and numbers, the market rose quickly even with the negative number as the market justified the number by the hurricanes over the past month and a temporary blip, however, having bushed quickly to the 113.40 level the market was quickly turned away from the level with weak stops appearing and the market slipping back to the 112.70 level and a slow slide over the last 5hrs to the close.
• AUD: The mo0ve through the Asian session saw the Oz struggling with the 0.7775 areas for the first half of Tokyo before breaking through the level and dropping back quickly to the 0.7750 area, the move through to the London session saw the market attempting to push through the 0.7775 area however, it struggled through into the NYK session holding around that number, before dropping back on the US releases, whether the market was expecting worse given the devastation in the gulf states by the Hurricanes remains to be seen however, aft a brief dip to the 0.7735 supportive area the market recovered back to the 0.7775 through into the closing period.

Yesterday’s premiership results

JPY         Labour Cash Earnings Y/Y Aug A 0.90% | C 0.50% | P -0.30% | R -0.60%

JPY         Leading Index Aug (P) A 106.8 | C 107.2 | P 105.2

EUR        German Factory Orders M/M Aug A 3.60% | C 0.70% | P -0.70% | R -0.40%

CHF        Foreign Currency Reserves (CHF) Sep A 724B | P 717B

CAD       Net Change in Employment Sep A 10K | C 14.0K | P 22.2K

CAD       Unemployment Rate Sep A 6.20% | C 6.30% | P 6.20%

USD       Change in Non-farm Payrolls Sep A -33K | C 77K | P 156K | R 169K

USD       Unemployment Rate Sep A 4.20% | C 4.40% | P 4.40%

USD       Average Hourly Earnings M/M Sep A 0.50% | C 0.30% | P 0.10%

CAD       Ivey PMI Sep A 59.6 | C 57.2 | P 56.3

USD       Wholesale Inventories Aug (F) A 0.90% | C 1.00% | P 1.00%

Stay lucky

Andy

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